"Expected Value" Essays and Research Papers

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Expected Value

Expected Monetary Value In a business environment, we frequently use probabilities to assess alternative financial decisions Example 1: A coin is tossed ten times. When a head is obtained, €4 is won. When a tail is obtained, €2 is lost Calculate the expected winnings. Outcome HEAD TAIL Winnings €4 -€2 Probability 0.5 0.5 Expected winnings in one toss: Expected Monetary Value (or just Expected Value (EV) = €1 Note: You never actually receive...

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Random Variable and Expected Average Return

problem is going to focus on betting $1.00 on the number group 1-12. If the ball lands in any of the values 1-12 the bet is won and the return is $3.00. If the ball lands on any of the other values the bet is lost. a.) Compute the expected value of this game. (4 points) X 2 -1 P(x) 12/38 26/38 X*P(x) .631 -.684 -.053 The expected value is -.053. b.) Interpret this expected value. (4 points) This means that the casino wins 5.3 cents per game or the players lose 5.3 cents per...

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The Game of Pig Portfolio

am yet to discover, for example, statistics class. Best Strategy: The best strategy is to get to 20 points and end your turn. This should take roughly 5 rolls of the dice seeing as the expected value per roll is 4. Four multiplied by five is 20. You should take 5 rolls because after five rolls the expected value of points begins to go up by smaller and smaller margins....

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Project Management Case Study 5

at which he can expect the project to take to be completed. “In this calculation, the midpoint between the pessimistic and optimistic values is the weighted arithmetic mean of the mode and mid-range, representing two-thirds of the overall weighting for the calculated expected time. The additional weighting is intended to highlight the clustering of expected values around the distribution mean, regardless of the length of both pessimistic and optimistic tails” (Pinto 292). ...

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Bus 650 Managerial Finance Closing Case Pg 489

Closing Case Pg 489 1.What is the expected value of the company in one year, with and without expansion? Would the company stockholders be better off with or without expansion? Why? The expected values of the company without expansion goes as followed (.3)(11,000,000)+(.5)(17,500,000)+(.2)(22,5000,000)=165,500,000 The expected value of the company with expansion goes as followed: (.3)(13,000,000)+(.5)(24,000,000)+(.2)(28,500,000)=215,000,000 (215,000,000)-(4,500,000(cost))=170...

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scale, where an A is a 4.0, a B a 3.0, and so on. Determine the expected grade and variance for the course. 4*0.15+3*0.25+2*0.38+1*0.12+0=0.6+0.75+.76+0.12=2.23 3. An investment firm is considering two alternative investments, A and B, under two possible future sets of economic conditions, good and poor. There is a .60 probability of good economic conditions occurring and a .40 probability of poor economic conditions occurring. The expected gains and losses under each economic type of conditions are...

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Decision Tree Case Study

their values in terms of profits and losses are for each of the two tooling alternatives, also visualize the outcomes of different prospects in order make better decision under uncertainty Strengths of decision tree analysis Decision tree analysis will show all the alternatives, probabilities, costs and the possible outcomes that are not even consider by the company. The company can add the possible scenario into decision tree diagram, through the diagram can calculate the expected values and a...

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Digital Everywhere Inc

equity Terminal Value= TV= FCFFn × (1+g)/ (WACC – g) Following table summarizes the impact of growth of 5% with changes in operation of cash flow and expected value of the firm. Growth rate WACC FCFF Value of firm Probability Weighted value of firm 3% 14.35% 100% $76,481.712 30% $22,944.52 3% 14.35% 50% $32,882.04 30% $9,864.61 3% 14.35% 0% $0 40% 0 Total Value $32,809.132 At growth rate of 3%, the expected value of Digital Everywhere is $32,809.132 Growth rate WACC FCFF Value of firm Probability...

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Homework OPM

and 0.35, respectively. A small facility is expected to earn an after-tax net present value of just $18,000 if demand is low. If demand is average, the small facility is expected to earn $75,000; it can be increased to medium size to earn a net present value of $60,000. If demand is high, the small facility is ex- pected to earn $75,000 and can be expanded to medium size to earn $60,000 or to large size to earn $125,000. A medium-sized facility is expected to lose an estimated $25,000 if demand is...

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Case Study 1 1

Pashikanti, Yingqi Yang, Hao Zhu Executive Summary In this case, our group used the techniques such as PERT, project crushing and visualization to solve the scheduling problems encountered in a development project at B&W Systems. We came up with the expected completion time and crashing solution to help the company meet the deadline. The problem was successfully solved. Statement of the Problem The 3 questions our group tried to answer were: How long will the development project at B&W Systems take...

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